Pound rallies as official data shows strong spending on High Street

0
83


The pound rallied again today as official figures showed British shoppers defied Brexit concerns to continue their spending spree into August.

Retail sales jumped 3.3 per cent in August compared to the same month a year earlier, with households spending more on food and household goods than last summer. That spurred the otherwise volatile pound, which rose by a cent against the dollar to 1.321 and by half a cent against the euro to 1.130.

Yesterday sterling initially spiked after inflation data showed prices rising faster than had been expected. That saw traders shortening the odds on another rate rise before Brexit and buying the pound. 

The last three months of summer from June to August saw sales rise by 3.4 per cent compared with the previous summer, with food sales doing well in the warm weather.

The last three months of summer from June to August saw sales rise by 3.4 per cent compared with the previous summer, with food sales doing well in the warm weather.

The last three months of summer from June to August saw sales rise by 3.4 per cent compared with the previous summer, with food sales doing well in the warm weather.

But sterling was later slapped back down as it emerged that Theresa May was told her widely reviled Brexit plans need to be ‘reworked’ as time runs out to reach a deal with the European Union.

Brexit news helped the UK currency today, with confidence growing that a trade deal – helping Britain to avoid a disorderly and messy exit from the EU – can be clinched in the coming months.

The Office for National Statistics retail data showed retail sales rose by 0.3 per cent in August from July, which was significantly better than the 0.2 per cent fall that a Reuters news agency survey of economists had forecast. 

Sales of household goods jumped by 4.5 per cent while other non-food stores enjoyed a 2.8 per cent rise, however food sales fell by 0.6 per cent and clothing fell by 1.9 per cent. 

The strong retail data had traders buying the pound, which surged against the dollar

The strong retail data had traders buying the pound, which surged against the dollar

The strong retail data had traders buying the pound, which surged against the dollar

Against the euro the pound gained half a cent in morning trading in response to the retail data

Against the euro the pound gained half a cent in morning trading in response to the retail data

Against the euro the pound gained half a cent in morning trading in response to the retail data

The last three months of summer from June to August saw sales rise by 3.4 per cent compared with the previous summer, with food and household goods stores doing well in the warm weather.

Spending online continued to increase to reach a new record proportion of all retailing at 18.2 per cent, while spending in department stores also reached a record proportion at 18.4 per cent.

ONS senior statistician Rhian Murphy said: ‘Retail sales remained strong in the three months to August, with continued growth across all sectors.

Sales volumes in August were 3.3 per cent up on the same month last year.

Sales volumes in August were 3.3 per cent up on the same month last year.

Sales volumes in August were 3.3 per cent up on the same month last year.

Store prices have increased at a steady annual rate of 2-3 per cent since February.

Store prices have increased at a steady annual rate of 2-3 per cent since February.

Store prices have increased at a steady annual rate of 2-3 per cent since February.

‘Food and household goods stores particularly benefited from the warm weather when compared with last summer.

‘The figures for the month of August were a little more mixed, with food sales falling after strong sales earlier in the summer, and clothing sales declining following a strong July, as suggested by clothing retailers. On the other hand, household goods grew strongly.’

Tom Stevenson, investment director for Personal Investing at Fidelity International, said that this week’s data increases the Bank of England’s interest rate dilemma, ‘and, at the margin, make a rate hike later this year more likely’. 

Food sales were well up in August on the same month last year, as were non-food sales.

Food sales were well up in August on the same month last year, as were non-food sales.

Food sales were well up in August on the same month last year, as were non-food sales.

But food sales were down in August compared to a hot July.

But food sales were down in August compared to a hot July.

But food sales were down in August compared to a hot July.

‘However, the Bank of is likely to remain focused on the high degree of Brexit uncertainty and tread carefully,’ he added.

‘Looking further ahead, the pain for bricks-and-mortar retail is far from over as the growth of e-commerce continues. 

‘However, it would be wrong to assume there can be no winners at all in this environment, even among those companies with their roots in shops. It really does pay to take an active approach and carefully look under the bonnet to see what steps retailers are taking to adapt to the chillier climate.’

Brexit negotiations remain the dominant driver for the pound, and investors have become increasingly confident about Brexit in the last week or two.

Cabinet Office minister David Lidington said on Thursday Britain was more than 85 per cent of the way to agreeing a deal.

But there remains a way to go. Prime Minister Theresa May, speaking at the EU leaders summit in Salzburg in Austria on Wednesday, urged her EU counterparts to drop ‘unacceptable’ Brexit demands that she said could rip Britain apart.

‘On we go with Brexit talks as the EU summit in Salzburg tries both to be tough on the UK and get a deal onto the table,’ FX strategists at Societe Generale told Reuters.

‘The Irish border issue remains the chief stumbling block to a deal, while the EU prepares for a November summit where it hopes an agreement will be sealed. EUR/GBP is for now clinging onto the uptrend support line drawn from the April low.’ 



Source link

LEAVE A REPLY

Please enter your comment!
Please enter your name here